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Adani’s Bold Move: Green Hydrogen Project Thrives Amid Uncertainty

Billionaire entrepreneur Gautam Adani is pushing forward with his ambitious green hydrogen project in India, even as the involvement of France-based TotalEnergies remains uncertain. In February, TotalEnergies, a major foreign investor in Adani’s conglomerate, temporarily suspended its participation in the $50 billion hydrogen initiative following concerns raised by Hindenburg Research.

Jugeshinder Singh, Chief Financial Officer at Adani Enterprises Ltd., recently reassured investors that the project would proceed independently of TotalEnergies’ equity contribution. While the memorandum of understanding between the two companies for hydrogen cooperation remains in place, the extent of TotalEnergies’ direct involvement remains unclear.

Previously, TotalEnergies had committed to acquiring a 25% stake in Adani New Industries Ltd., with the aim of supporting green hydrogen projects in India. Adani’s initial foray into green hydrogen involves a $5 billion integrated facility, encompassing manufacturing plants for wind turbines, solar modules, and renewable energy generation capacity.

Despite the uncertainty surrounding TotalEnergies’ participation, Adani Enterprises is determined to move ahead with its hydrogen venture. The company plans to invest approximately $300 million in the hydrogen business in the current fiscal year, with increasing investments anticipated in the following years. Adani Enterprises has allocated a total capital investment of $3.7 billion for the year.

TotalEnergies, which holds a substantial $3.1 billion investment in the Adani group, decided to await the outcome of an audit initiated by the conglomerate in response to allegations of accounting and financial misconduct raised by Hindenburg Research.

In their initial partnership announced in June 2022, Adani New Industries Ltd. was expected to contribute its knowledge of the Indian market, execution capabilities, operational excellence, and capital management philosophy. In contrast, TotalEnergies was set to bring its global market insights, credit enhancement capabilities, financial strength, and expertise in underlying technologies to lower financing costs.

Adani’s green hydrogen production plans extend to manufacturing downstream products such as ammonia, urea, methanol, and ethanol at its Khavda and Mundra SEZ facilities. With a significant land bank of 71,000 acres and a high renewable energy resource potential, the Khavda site is poised for substantial renewable deployment, with a target of 20 GW.

By using alkaline and PEM electrolysis processes, Adani Enterprises aims to produce 2.5 million tonnes of green hydrogen annually by FY31 at the Khavda facility.

Despite challenges such as a decline in revenue due to corrections in coal prices, Adani Enterprises remains committed to advancing its green hydrogen project, symbolizing a significant shift toward sustainable energy in India’s industrial landscape.

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